Next-Level Borrowing: How to Apply for Loans the Smart Way

How to Choose the Right Personal Loan, Avoid High Interest Rates, and Steer Clear of Predatory Cash Advances

Whether you’re consolidating debt, covering emergency expenses, or funding a major life event, taking out a loan is sometimes the right move — but only if done strategically. With personal loans more accessible than ever through banks, credit unions, and online lenders, it’s important to understand how to borrow smartly, safely, and cost-effectively.

In this blog, we’ll break down how to determine the best personal loan for your situation, offer tips for avoiding high interest rates, and explain why cash advance services often do more harm than good.

Step 1: Understand Why You’re Borrowing

Before you compare lenders, get clear on your “why.” What’s the purpose of the loan?

• Do you want to consolidate high-interest credit card debt?
• Are you facing an unexpected medical bill or car repair?
• Is this to finance a large, planned purchase or major life event?

Being intentional about your purpose helps determine the best loan type, amount, and repayment terms. It also ensures you’re borrowing as a solution—not a habit.

Level Coaching Tip: If you’re borrowing to “catch up” or make ends meet each month, the issue might not be income but spending habits or lack of budgeting. Consider speaking with a coach before applying.

Step 2: Know What Makes a “Good” Personal Loan

Not all loans are created equal. A good personal loan is one that:

• Has a reasonable interest rate
• Offers clear, fixed terms
• Doesn’t hide fees (like origination or prepayment penalties)
• Reports to credit bureaus (to help build your credit)
• Comes from a reputable lender

When comparing loans, look beyond the monthly payment and dig into the APR (Annual Percentage Rate), which includes interest and any additional fees. The lower the APR, the better the deal.

Pro Tip: Use a loan comparison site or work with a loan broker that lets you check multiple offers without impacting your credit score.

Step 3: Improve Your Odds for Better Terms

The interest rate you’re offered is directly tied to your credit score, income, and debt-to-income (DTI) ratio. Here’s how to set yourself up for better offers:

Check and Improve Your Credit Score

Before applying, review your credit reports at AnnualCreditReport.com and dispute any inaccuracies. Even a small credit score boost can result in a much lower APR.

Lower Your Debt-to-Income Ratio

Lenders look at how much of your income goes toward existing debt. Paying down revolving balances (like credit cards) can make a big difference.

Apply with a Co-signer (If Necessary)

If your credit history is limited or damaged, applying with a co-signer who has strong credit can help secure a better rate. Just make sure they understand the responsibility—they’re equally on the hook for repayment.

Step 4: Don’t Just Accept the First Offer

It’s tempting to grab the first loan you’re approved for, especially if you’ve struggled with credit in the past. But doing so can cost you thousands in unnecessary interest.

Take time to compare at least 3–5 lenders, focusing on:

• APR (including fees)
• Repayment terms (12–60 months is typical)
• Monthly payment
• Prepayment penalties
• Funding time (some fund within 24 hours; others take a week)

Important Reminder: If you’re Googling “best personal loans for bad credit,” be cautious. Many sites are paid affiliates. Look for neutral, educational content or consult a coach at Level for help understanding your options.

Step 5: Watch Out for These Red Flags

When reviewing loan offers, keep an eye out for warning signs. Predatory lenders often target people with low credit or in financial distress.

• Very high interest rates (30% and up)
• Large upfront fees or “processing charges”
• No credit check required (this usually signals a payday or cash advance loan)
• Aggressive sales tactics or “limited time” pressure

What About Cash Advance Services?

Let’s talk about cash advances, including payday loans, title loans, and apps offering early access to your paycheck. These might look like a quick fix—but they’re financial quicksand.

Why They’re So Dangerous:

• Sky-high interest rates: Many payday loans have APRs exceeding 300 percent
• Short repayment windows: Often due within 2 weeks
• Debt trap cycles: Most users end up taking out multiple loans to repay the original
• No help to your credit: These don’t report to credit bureaus, so they don’t improve your credit

Even apps like Earnin or Dave, which offer early paycheck access, can create dependence and disrupt your ability to budget consistently.

Straight Talk: If a lender makes it feel “too easy” to borrow, they probably profit from your pain. True financial progress doesn’t come from quick fixes.

Smarter Alternatives to Cash Advances

If you’re facing a short-term emergency, consider:

Personal loan through a credit union or online lender

These usually offer better terms than payday lenders, even for borrowers with fair credit.

Payment plan through the provider

For medical bills, auto repairs, or vet expenses, ask if a zero-interest payment plan is available.

Financial coaching and budgeting support

Sometimes, the issue isn’t lack of money—it’s lack of clarity. A coach can help you find “hidden money” in your budget and avoid borrowing altogether.

How Level Coaching Can Help You Borrow Smarter

At Level Coaching, we don’t just help you survive your financial challenges—we help you overcome them with knowledge, support, and action.

As part of our coaching program, you’ll get:

• Education on how interest, credit, and loan structures work
• Access to real financial coaches for guidance
• Tools to build your budget and improve your credit
• Access to lending partners
• Support choosing the right loan product (or deciding if a loan is even necessary)
• Protection through will and trust planning, credit monitoring, and more

We believe in empowerment over dependency. With the right guidance, you can make borrowing a strategic step, not a desperate one.

Final Thoughts: Borrowing Isn’t Bad—But It Should Be Intentional

Personal loans can be a helpful tool when used wisely. But they’re just that—a tool, not a solution. Before signing on the dotted line:

• Know your purpose
• Compare multiple offers
• Read the fine print
• Ask for help when unsure

And above all, avoid cash advances at all costs. They prey on short-term desperation and can derail long-term goals.

Want help making a smart decision? Speak to a Level Coach today and make your next money move your best one yet.

Written by Nichole Olds,
June 2025